Critical issues for which neither side seems able to deal with. A right catch-22 ....
A)
1-Israelis won't give up their settlements in the west bank (check the usual maps (TIME mag this week)) and this will continue to perfectly justifiably enrage and alienate Palestinians from the west bank who lost their land post 1967.
2-Israelis generally and justifiably, no longer have one iota of faith in Yassar Arafat's integrity.
3-The Israelis won't accept Palestinian demands that Jerusalem be made capital of Palestine (the country).
B)
1-The Palestinians won't back down on demanding that all refugees be allowed to return to their ancestral homes - even where these are now part of Israel (pre 1967 borders). Asking for this is to ask for Israelis to be out populated by Palestinians within their own country by year 2010 and thus become a minority in Israel.
2-The Palestinians won't accept power sharing or neutral control of Jerusalem.
My ideal solution (that has zero probability of even being discussed ...)
1.Compensate the pre 1967 expelled Palestinians by giving them the settlements occupied by Israelis in the west pank & gaza regions.
2.Give Israel full diplomatic recognition (per Saudi plan).
3.Allow Jerusalem to become an 'international city' with joint control, for the next 100 years or so
4.Build a fu***** big wide wall between the two peoples after the above are achieved
Cheers
Doug the Diplomat